In the latest Jobless Claims report, new claims dropped by another -29,000 to 343,000, well below the consensus estimate for 370,000.
It was only a few weeks ago that new claims surged higher to roughly 450,000, undoing the steady decline in jobless claims and bringing the number to the highest level in a year and a half. Granted, the sharp increase was attributed to hurricane Sandy and the claims that followed the storm.
But those claims have been reversed and now we're back to where we were before the storm, which is near its lowest levels since the post financial crisis recovery began.
The 4-week average, of course, still has some catching up to do. But if new claims stabilize, or better yet, head even lower, the smoothed out average will quickly follow suit.
Some are cautioning, following this report, to not get too excited, as the volatility of these numbers lately could once again gyrate wildly from one week to the next. But it's unlikely, in my opinion, that we'll see any sharp changes, the likes of which we've just seen due to the hurricane, absent a new major event.
So this report is definitely good news. The key will be if these numbers can continue to edge lower.
The question now is:
- Are you expecting Jobless Claims to keep this trend of improvement going?
- Will it level off for a while?
- Or do you think these numbers are back on their way up next year with taxes going up and spending cuts on the horizon?
What do you think?